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Trusts and Equity: Case List and Case Law summary
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Summary of cases for Trusts and Equity
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TRUSTS CASE LIST1. Walsh v Lonsdale
- Owners of mill (defendant) leased the property to lessors (claimant), but they did
not comply with all provisions required to make it a deed.
- BUT both parties treated it as a deed.
- A provision in agreement said landlord could demand a year’s rent in advance.
- Lessors refused this, arguing there was no real lease.
- Landlord decided to take possession of some of the property (this would be perfectly
legal had there been legal lease)
- Issue: could this be treated as lease in equity? Under common law a lease had to be
created by deed to be legal.
- Held: Jessel MR = although there's no legal lease, equity will recognise an equity
lease. Court found in favour of the defendants.
- Judicature Acts 1873-75 had fused the courts + if there was conflict, equity prevails.
- The parties were treated as having a lease enforceable in equity --> court could order
specific performance of it.
- Maxim: equity sees as done that which ought to be done
2. AG v Blake
- Blake (defendant) was former govt. member and wanted to release his memoir of
time in government.
- But he had signed agreement to not divulge any government information.
- In his memoir he breached the Official Secrets Act, by revealing information.
- A-G did not want him to do that.
- A-G brought claim saying he had breached fiduciary duty and wanted the money
Blake had made from book sales in damages.
- Issue: should the courts recognise equity for common law wrong? He had done the
one thing he had agreed not to do.
- Held: Lord Nicholls said yes. Breach of fiduciary duty – must not make unauthorised
profits by putting self in a conflict of interest.
- Held that in exceptional cases, when the normal remedy is inadequate for
compensation of breach of contract, the court can order the defendant to account
for all profits. This was an exceptional case as Blake harmed the public interest.
Publication was further breach of his undertaking of confidentiality.
- Damages, injunction and SP not enough so ordered to give up profits.
3. AIB v Mark Redler
- Purchase of property, where solicitors had made a mistake which cost the bank a lot
of money
- By the time the issue reached the court, the property was worth significantly less
- The mistake the lawyers had made cost the bank thousands, but the time delay had
turned the loss into millions
,- Issue: were the lawyers liable for the millions they had indirectly caused?
- Held: in common law, only be liable for the thousands. Strict equity would hold the
solicitors liable for the million pounds lost due to the time wasted, whereas strict
application of common law would only hold the solicitors liable for the few hundred
pounds which they had directly caused the loss of.
- Lord Reid: To the extent that the same underlying principles apply, the rules should
be consistent. To the extent that the underlying principles are different, the rules
should be understandably different.’
4. Co-operative Insurance Society v Argyll Stores
- C owned a shopping centre and D owned the supermarket in the shopping centre
- D’s supermarket was failing so they wanted to close it. But C feared that it would
reduce the number of customers coming into the shopping centre.
- C demanded SP to keep the contract going
- Held: SP cannot be enforced. D would suffer greater loss by being forced to perform
the contract than C would if the supermarket was closed down.
- Also, the clause in agreement was not specific enough to be capable of SP.
- Hoffman: granting specific performance is usually dependent on general principles.
- 'The principles upon which English judges exercise the discretion to grant specific
performance are reasonably well settled and depend upon a number of
considerations, mostly of a practical nature, which are of very general application.’
5. Beswick v Beswick
- Sale of coal business to nephew. Agreed to pay uncle weekly
- Also agreed to pay wife weekly, even after the uncle died
- After uncle died, he stopped paying the wife
- Held: wife could not enforce SP personally because she was a third party to the
contract. BUT wife, as husband’s administrator of the estate, could demand SP of
contract on behalf of her husband rather than personally.
- Equity will grant SP when damages are inadequate
6. Penn v Lord Baltimore
- Maxim: equity acts in personam
- This maxim states that equity relates to a person rather than their property
- It applies to property outside a jurisdiction provided that the defendant is within the
jurisdiction
- In this case -> land dispute was in Pennsylvania, but the contract was made in
England. English courts were able to order SP on land in the US despite the
defendant being in the UK.
7. American Cyanamid
- C alleged D violated their patent to a product
- Issue: could there be an injunction to stop D from selling it until hearing?
- Held: interim prohibitive injunction granted.
, - ‘balance of convenience’ test established – looks at loss each party will incur if
injunction occurs or nor. Highlights the discretionary nature of equity
- Held that injunction would not be granted if damages are adequate
Conditions for awarding damages rather than injunction:
8. Shelfer v City of London Electric
o 1) If the injury to the plaintiff's legal right is small
o 2) can be estimated in money
o 3) can be adequately compensated by small payment of money
o 4) it would be oppressive to D to grant an injunction
o = then damages in substitution for an injunction may be given
9. Pitt v Holt
- Husband involved in serious accident, would require extensive needs for the rest of
his life
- He received a large settlement which was put into a special needs trust
- The trust was incorrectly set up so P was exposed to extensive inheritance tax
liability
- Issue: could the trust/mistake be set aside?
- Held: test for mistake – is it sufficiently serious?
- The unconscionableness of leaving a mistaken disposition uncorrected must be
evaluated objectively on the facts of the case. Court needs to consider:
its degree of centrality to the transaction in question
seriousness of its consequences
would it be unconscionable/ unjust to leave mistake uncorrected?
- Allowed to rescind the mistake.
10. Wright v National West Minster Bank (Applying Pitt)
- Mr W created a trust with the bank as the trustee.
- Trust was in favour of his children + widow.
- Trust states that anyone would be excluded from list of beneficiaries if they
added to the trust fund.
- Mrs. W made a mistake and contributed to the trust, thus, was no longer eligible.
- Held: Allowed to be set aside because it would be unjust to leave mistake
uncorrected.
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